THE RISING PRICE OF A QUALITY POSTSECONDARY EDUCATION: FACT OR FICTION

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by  Committee on Education and the Workforce

THE RISING PRICE OF A QUALITY
POSTSECONDARY EDUCATION:
FACT OR FICTION?
HEARING
BEFORE THE
COMMITTEE ON EDUCATION AND
THE WORKFORCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
HEARING HELD IN WASHINGTON, DC, OCTOBER 3, 2002
Serial No. 107-83
Printed for the use of the Committee on Education
and the Workforce
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COMMITTEE ON EDUCATION AND THE WORKFORCE
JOHN A. BOEHNER, Ohio, Chairman
THOMAS E. PETRI, Wisconsin GEORGE MILLER, California
MARGE ROUKEMA, New Jersey DALE E. KILDEE, Michigan
CASS BALLENGER, North Carolina MAJOR R. OWENS, New York
PETER HOEKSTRA, Michigan DONALD M. PAYNE, New Jersey
HOWARD P. “BUCK” McKEON, California ROBERT E. ANDREWS, New Jersey
MICHAEL N. CASTLE, Delaware TIM ROEMER, Indiana
SAM JOHNSON, Texas ROBERT C. “BOBBY” SCOTT, Virginia
JAMES C. GREENWOOD, Pennsylvania LYNN C. WOOLSEY, California
LINDSEY O. GRAHAM, South Carolina LYNN N. RIVERS, Michigan
MARK E. SOUDER, Indiana RUBEN HINOJOSA, Texas
CHARLIE W. NORWOOD, JR., Georgia CAROLYN McCARTHY, New York
BOB SCHAFFER, Colorado JOHN F. TIERNEY, Massachusetts
FRED UPTON, Michigan RON KIND, Wisconsin
VAN HILLEARY, Tennessee LORETTA SANCHEZ, California
VERNON J. EHLERS, Michigan HAROLD E. FORD, JR., Tennessee
THOMAS G. TANCREDO, Colorado DENNIS KUCINICH, Ohio
JIM DeMINT, South Carolina DAVID WU, Oregon
JOHNNY ISAKSON, Georgia RUSH D. HOLT, New Jersey
BOB GOODLATTE, Virginia HILDA L. SOLIS, California
JUDY BIGGERT, Illinois SUSAN DAVIS, California
TODD RUSSELL PLATTS, Pennsylvania BETTY McCOLLUM, Minnesota
PATRICK J. TIBERI, Ohio VACANCY
RIC KELLER, Florida
TOM OSBORNE, Nebraska
JOHN ABNEY CULBERSON, Texas
JOE WILSON, South Carolina
Paula Nowakowski, Chief of Staff
John Lawrence,Minority Staff Director
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TABLE OF CONTENTS
TABLE OF CONTENTS.................................................................................................................i
OPENING STATEMENT OF CHAIRMAN JOHN A. BOEHNER, COMMITTEE ON
EDUCATION AND THE WORKFORCE, U.S. HOUSE OF REPRESENTATIVES,
WASHINGTON, D.C.....................................................................................................................1
OPENING STATEMENT OF RANKING MINORITY MEMBER GEORGE MILLER,
COMMITTEE ON EDUCATION AND THE WORKFORCE, U.S. HOUSE OF
REPRESENTATIVES, WASHINGTON, D.C..............................................................................3
STATEMENT OF DR. ROBERT A. CORRIGAN, PRESIDENT, SAN FRANCISCO STATE
UNIVERSITY, SAN FRANCISCO, CALIFORNIA.....................................................................5
STATEMENT OF C.D. MOTE, JR., PRESIDENT, UNIVERSITY OF MARYLAND AND
PROFESSOR OF ENGINEERING, GLENN L. MARTIN INSTITUTE, COLLEGE PARK,
MARYLAND.................................................................................................................................7
STATEMENT OF DR. RICHARD M. FREELAND, PRESIDENT, NORTHEASTERN
UNIVERSITY, BOSTON, MASSACHUSETTS..........................................................................9
STATEMENT OF DR. GORDON WINSTON, PROFESSOR OF ECONOMICS, WILLIAMS
COLLEGE, WILLIAMSTOWN, MASSACHUSETTS..............................................................11
APPENDIX A -- WRITTEN OPENING STATEMENT OF CHAIRMAN JOHN A. BOEHNER,
COMMITTEE ON EDUCATION AND THE WORKFORCE, U.S. HOUSE OF
REPRESENTATIVES, WASHINGTON, D.C............................................................................31
APPENDIX B -- WRITTEN STATEMENT OF DR. ROBERT A. CORRIGAN, PRESIDENT,
SAN FRANCISCO STATE UNIVERSITY, SAN FRANCISCO, CALIFORNIA.....................37
APPENDIX C -- WRITTEN STATEMENT OF C.D. MOTE, JR., PRESIDENT, UNIVERSITY
OF MARYLAND AND PROFESSOR OF ENGINEERING, GLENN L. MARTIN INSTITUTE,
COLLEGE PARK, MARYLAND...............................................................................................49
APPENDIX D -- WRITTEN STATEMENT OF DR. RICHARD M. FREELAND, PRESIDENT,
NORTHEASTERN UNIVERSITY, BOSTON, MASSACHUSETTS........................................59
APPENDIX E -- WRITTEN STATEMENT OF DR. GORDON WINSTON, PROFESSOR OF
ECONOMICS, WILLIAMS COLLEGE, WILLIAMSTOWN, MASSACHUSETTS................91
APPENDIX F -- WASHINGTON POST ARTICLE SUBMITTED FOR THE RECORD BY
REPRESENTATIVE ROBERT C. “BOBBY” SCOTT, COMMITTEE ON EDUCATION AND
THE WORKFORCE, U.S. HOUSE OF REPRESENTATIVES, WASHINGTON, D.C..........105
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APPENDIX G – WRITTEN STATEMENT SUBMITTED FOR THE RECORD BY
REPRESENTATIVE PETER HOEKSTRA, COMMITTEE ON EDUCATION AND THE
WORKFORCE, U.S. HOUSE OF REPRESENTATIVES, WASHINGTON, D.C..................109
APPENDIX H – WRITTEN STATEMENT SUBMITTED FOR THE RECORD BY
REPRESENTATIVE HAROLD FORD, JR., COMMITTEE ON EDUCATION AND THE
WORKFORCE, U.S. HOUSE OF REPRESENTATIVES, WASHINGTON, D.C..................113
APPENDIX I – WRITTEN STATEMENT SUBMITTED FOR THE RECORD BY
REPRESENTATIVE DENNIS J. KUCINICH, COMMITTEE ON EDUCATION AND THE
WORKFORCE, U.S. HOUSE OF REPRESENTATIVES, WASHINGTON, D.C..................117
TABLE OF INDEXES...............................................................................................................121
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HEARING ON THE RISING PRICE OF A QUALITY
POSTSECONDARY EDUCATION: FACT OR FICTION?
_____________________________
THURSDAY OCTOBER 3, 2002
COMMITTEE ON EDUCATION AND THE WORKFORCE,
U.S. HOUSE OF REPRESENTATIVES
WASHINGTON, D.C.
The committee met, pursuant to notice, at 9:37 a.m., in Room 2175, Rayburn House Office
Building, Hon. John A. Boehner [chairman of the committee] presiding.
Present: Representatives Boehner, McKeon, Castle, Johnson, Ehlers, Biggert, Tiberi,
Wilson, Miller, Roemer, Scott, Woolsey, Rivers, Tierney, Kind, Solis, and Davis.
Staff present: George Conant, Professional Staff Member; Patrick Lyden, Professional
Staff Member; Deborah L. Samantar, Committee Clerk/Intern Coordinator; Kathleen Smith, Senior
Communications Counselor; Jo-Marie St. Martin, General Counsel; Holli Traud, Legislative
Assistant; Heather Valentine, Press Secretary; John Lawrence, Minority Staff Director; Charles
Barone, Minority Deputy Staff Director; Mark Zuckerman, Minority General Counsel; James
Kvaal, Minority Legislative Associate/Education; Maggie McDow, Minority Legislative
Associate/Education; Alex Nock, Minority Legislative Associate/Education; Joe Novotny,
Minority Staff Assistant/Education; Ann Owens, Minority Clerk; Suzanne Palmer, Minority
Legislative Associate/Education; and Peter Rutledge, Minority Senior Legislative Associate/Labor.
OPENING STATEMENT OF CHAIRMAN JOHN A. BOEHNER, COMMITTEE ON
EDUCATION AND THE WORKFORCE, U.S. HOUSE OF REPRESENTATIVES,
WASHINGTON, D.C.
Chairman Boehner. A quorum being present, the Committee on Education and the Workforce
will come to order. We are meeting today to hear testimony on the rising costs of postsecondary
education. Under Committee Rule 12(b), opening statements are limited to the Chairman and
ranking member.
With that, I ask unanimous consent for the hearing record to remain open for 14 days to
allow member statements and other extraneous material referenced during the hearing today to be
submitted for the official record. Without objection, so ordered.
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Let me just apologize for the normal course of action around here. Yesterday afternoon we
were called to the floor for votes. Unfortunately, today we are likely to have something similar, but
we are going to try to get through all of the testimony.
I do understand that several witnesses have to leave at 10 o'clock. I do appreciate your
willingness to come back today. We are going to try to move this as quickly as we can today.
We are here today to examine the increasing costs of postsecondary education and the effect
it has on students and families.
As we approach the upcoming reauthorization of the Higher Education Act, I think it is
important for every member of this committee to understand what is really happening with tuition
prices and what factors influence tuition increases, and what we can do at the federal level to try to
keep college costs affordable for students across the country.
Since the early 1980s, tuition and fees of postsecondary institutions have outpaced increases
in the rate of inflation and family incomes. Each year, these cost hikes have been two to three
times the rate of inflation. And while we have continued to increase student financial assistance
significantly every year, tuition spikes have outpaced our best efforts to stem this trend.
When we return to our districts, many of us hear from parents, students, and others about
their worries over funding of a postsecondary education. It concerns me that at a time when we
make available far in excess of $50 billion a year in student financial assistance, not to mention the
billion dollars spent by states, philanthropies, colleges, and universities themselves, parents and
students are afraid they won't be able to pay for college.
Last year, under the rate cut formula negotiated by Chairman McKeon as part of the 1998
Higher Education Act reauthorization, the federal student loan rate fell to its lowest level in history.
Since 1995, we have significantly increased our aid for postsecondary education.
More students are receiving more federal support than ever, and we have increased the
maximum Pell to historic highs. The Pell Grant Program is our highest priority for postsecondary
education. Since 1998, the maximum grant has increased by 33 percent.
The CEOG program, which provides supplemental grant aid, is also at an all time high of
$918 million. College work- study, which helps needy students earn while they learn, has been
increased to $1.2 billion per year, and the list goes on.
These programs are often the only hope for low-income students to achieve their dream of
obtaining a higher education. Unfortunately, tuition increases have exceeded even these significant
gains. Since 1981, the average tuition at public and private nonprofit institutions has more than
doubled, even after taking inflation into account.
During that same time, family incomes have only increased some 27 percent, in real terms.
Given these statistics, it is easy to understand why families have real concerns about how they are
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going to pay for college.
Let me, at this time, yield to my colleague from California, Mr. Miller.
WRITTEN OPENING STATEMENT OF CHAIRMAN JOHN A. BOEHNER, COMMITTEE ON
EDUCATION AND THE WORKFORCE, U.S. HOUSE OF REPRESENTATIVES,
WASHINGTON, D.C. – APPENDIX A
OPENING STATEMENT OF RANKING MINORITY MEMBER GEORGE MILLER,
COMMITTEE ON EDUCATION AND THE WORKFORCE, U.S. HOUSE OF
REPRESENTATIVES, WASHINGTON, D.C.
Mr. Miller. Mr. Chairman, in the interest of time, I would like to associate myself with your
remarks, and just thank you for holding this hearing. I cannot think of a more important hearing
that this committee can conduct. I hope this is not the last hearing on this subject.
Somehow, we have got to figure out how to keep our pledge to make sure that every young
person has the option and can properly make the decision of whether or not they can or should
attend college without the financial considerations being a barrier to or thwarting the process by
which they would make the decision of whether or not college made sense for them.
I thank you again for holding the hearing.
Chairman Boehner. Let me recognize you, Mr. Miller, to introduce our first witness.
Mr. Miller. Well, we have a wonderful panel here, Mr. Chairman. I would like to introduce to the
members of the committee Dr. Robert Corrigan, who is the president of San Francisco State
University, my alma mater. He has been president since 1988. Before that, he was at the
University of Massachusetts.
He has also been deeply involved in our California community, and specifically in the San
Francisco community. He probably has among the best records in the nation of having work-study
students participate in public service within the community.
He has been deeply involved and chaired the effort of the ``America Reads'' challenge, and
has also worked very hard along with his colleagues in trying to figure out how you keep these
tuition costs down.
I think tuition at San Francisco State is now $1900, which is among the lowest in the nation,
somewhat higher than the $45 a quarter when I went there. But we could return to yesteryear. It
was $95 when I went to law school, and we shut the law school down because of the increase.
But, anyway, we are delighted to have you, President Corrigan, and look forward to your
testimony, along with the other members of the panel.
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Chairman Boehner. Our second witness today will be Dr. C.D. Mote, Jr. Dr. Mote became
president of the University of Maryland and a professor of engineering at the Glenn Martin
Institute in September of 1988. Prior to assuming the presidency at Maryland, Dr. Mote served for
31 years on the faculty of the University of California at Berkeley.
Let me recognize my colleague from Massachusetts, Mr. Tierney, to introduce our next
witness.
Mr. Tierney. Thank you, Mr. Chairman, for the privilege to introduce Richard Freeland, who is
the president of Northeastern University.
Northeastern University is a private university with a strong research program, and offers a
comprehensive range of undergraduate and graduate degree programs. It emphasizes the link
between classroom learning and workplace experience. The main campus is located in Boston.
But I am happy to say one of the satellite campuses is firmly entrenched in my district.
Both my district office and Washington office have benefited from Northeastern interns who have
given their time and energy.
Dr. Freeland began his service as president of Northeastern University in September of
1996. Although he has been president for six years, he spent his entire academic career in higher
education. Under his stewardship, Northeastern has striven to achieve excellence as a national
research university that is student-centered, practice-oriented, and urban.
Dr. Freeland has built upon Northeastern's practice-oriented education and tradition, and its
strength in ties between the classroom and the workplace. I want to note that the university has
increased its investment in student financial aid by 123 percent over the last five years.
This is indicative of the commitment to increase financial aid for deserving low-income
students. In addition, the university provides a tuition discount in the form of reduced tuition
charge.
I think we will all be interested in hearing more. I would like to thank Dr. Freeland for
joining the committee today, and look forward to hearing your testimony.
Chairman Boehner. Thank you, Mr. Tierney. Our last witness today will be Dr. Gordon Winston.
Dr. Winston has served as professor of economics for the Williams Project on the Economics of
Higher Education since 1990, and is a leading researcher on cost and price issues as they affect
postsecondary education.
Dr. Winston served as the director of the Williams Project from 1995 to 2001. Prior to that,
he served as the provost of Williams College. He is also a member of the Institute for Advanced
Study in Princeton, New Jersey, and was there from 1978 through 1979.
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He has offered numerous reports on the factors that affect tuition prices for the National
Center for Educational Statistics and the National Commission on the Cost of Higher Education.
Before our witnesses begin, members will ask questions when the witnesses are finished.
You will each have five minutes to summarize your statement.
With that, Dr. Corrigan, you can begin.
STATEMENT OF DR. ROBERT A. CORRIGAN, PRESIDENT, SAN FRANCISCO
STATE UNIVERSITY, SAN FRANCISCO, CALIFORNIA
Mr. Corrigan. Chairman Boehner, Ranking Member Miller, and Representative McKeon, and
distinguished members of the committee, my name is Robert Corrigan, and I am the president of
San Francisco State University, a 28,000-student public urban university that is part of a 23
California State campus system that enrolls over 370,000 students right now.
The mission of San Francisco State University, like that of the CSU system itself, is to
provide a high quality, accessible education to the students of a very diverse state. To ensure
access, the California State University has made a commitment to keep student fees as low as
possible while maintaining academic quality.
This commitment has enabled us to attract and to graduate a very diverse student
population. For example, at San Francisco State, almost 70 percent of our undergraduate students
are students of color. Their average age is 24; 80 percent of them work, many full-time, and almost
half receive financial aid.
For the current academic year, as Congressman Miller has suggested, the California State
University charges $1428 per year in what you would call tuition. And added to this are campus
space fees for local services such as student health facilities and student activities.
At San Francisco State, those fees total $398 annually, which means that our students pay a
total of $1826. That is less than $2000 for a full year of university study. I would argue that this is
an extraordinary educational bargain. Moreover, our tuition has not increased in eight years. In
fact, it was decreased by 5 percent in 1998/99, and by another 5 percent the following year.
However, it costs the California State University roughly $10,000 per year to educate a
student--considerably in excess of the roughly 2,000 that that student pays. Though the price of a
CSU education has held steady over the past eight years, its costs have continued to rise.
Moreover, CSU is in a period of rapid enrollment growth exceeding its state-funded target
this year by over 6,000 students; 25 percent of those unfunded students happen to be at San
Francisco State this year.
As you know, California faces a major budget crisis. This state's $24 billion current budget
deficit has already caused a CSU budget cut, and the fear is that there is more to come before the
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year is out. If the state is no longer able to support the costs of education, California State
University may have to look to other strategies to fund increased costs in enrollment growth, and
that could in fact include fee increases.
Let me assure the committee, however, that CSU and its campuses are in fact working hard
and imaginatively to cut costs and to increase efficiency while maintaining academic quality and
access.
One major very successful undertaking, for example, has been the system's move to year-
round operation. By greatly expanding summer course offerings, actually creating a summer
semester, we are able to increase our enrollment capacity significantly without the huge capital
costs that are associated with new buildings or new campuses. This also helps our students
accelerate their time to a degree, a fiscal benefit both to them and, I would argue, to the state of
California.
Another successful new approach is partnering with local community colleges in joint use
projects, sharing facilities, while offering community college students the chance to earn selected
four-year degrees at a site that might be convenient to them. For example, again, San Francisco
State's ``Pathways'' project with Canada College in San Mateo County is a venture of this kind.
Early intervention programs that reduce the need for university level remediation are
another California State University cost saver, and, I might add, quality enhancement. It frees up
academic resources that would otherwise go into extensive remediation and brings us, as a bonus,
better prepared students.
However, despite low fees, financial aid remains a critical component of the CSU's ability
to serve a diverse student population. Financial barriers continue, as the chairman has indicated, to
be a very real obstacle to a college education for many of our students.
The problem is particularly acute in San Francisco, which is one of the nation's most
expensive cities in which to live, or in a city like San Francisco. At San Francisco State, the
amount of unmet need, that is, expenses that students must face even after financial aid is factored
in, total over $30 million per year.
Our average financial aid award falls far below the actual costs of student attendance, and
this is money that students must find. They will do so by borrowing heavily from private loan
programs by working longer hours than they should, by enrolling part-time rather than full-time, or
by running up credit card debt.
I say this to highlight the need for the Federal Government to continue increasing financial
aid, as well as its investments in other higher education programs. We urge you to increase the Pell
Grant maximums, award levels; to increase funding for SEOG and federal work-study; and would
also like to see increased funding for GEARUP and TRIO programs.
Finally, Mr. Chairman, I would like to extend an invitation to the committee to visit our
campus in San Francisco, and consider the possibility of holding a field hearing there. That would